MEASURING OLIGOPOLISTIC DISTORTION IN THE UK FROZEN POTATO PRODUCT SECTOR - A CALIBRATION MODELING APPROACH

This paper compares competition levels in the UK and Dutch frozen pota to product sectors over the period 1980 to 1992 using a calibration mo del and conjectural variation analysis. We also obtain estimates of th e trade and welfare effects of oligopolistic distortion in the UK froz en potato product sector Results show that oligopolistic distortion in the UK raises Dutch imports by 25,700 tonnes in 1991/92 and by an ann ual average over the whole period of 13,000 tonnes. Further; the deadw eight loss due to oligopolistic distortion in the UK is increasing to a level of pound 32.1m in 1991/92 which comprises of a fall in UK cons umers' surplus of pound 170.2m and increases in UK and Dutch processor s' profit of pound 131.9m and pound 6.2m respectively. We conclude tha t the trade and welfare costs of the UK sector's oligopolistic behavio ur are high and increasing.